Insurance survey - Consumers may profit for a change

BELEAGUERED consumers could find profitable reading in the first independent survey on home insurance costs from the Irish Financial Services Regulatory Authority (IFSRA).

Its central revelation is that home owners can save up to 50% by simply taking the time to shop around for insurance.

By inference, however, the clear implication of the IFSRA report is that some insurance companies are brazenly charging customers twice what they should be paying for home cover.

In other words, people are being ripped off simply because they are not going to the trouble of shopping around.

As IFSRA Consumer Director, Mary O'Dea succinctly put it: "You should always look around to see what is on offer in the marketplace."

With the cost of virtually everything going through the proverbial roof in this country, that is sound advice. Potentially, this survey could mean big savings for homeowners, especially families groaning under the weight of punitive insurance charges.

Most people have a knee-jerk tendency to pay up when the renewal notice drops through the letter box. But, according to IFSRA, you should think twice and make sure the policy is tailor-made to suit your home and circumstances.

With winters getting wetter amid changing weather patterns of global warming, those living in areas liable to flooding will find this document particularly helpful.

For them, the dilemma is that some insurers will not quote for homes at risk of flooding or subsidence, while others will provide cover, but not include flooding or subsidence risks in the policy.

On the face of it, those trapped in the traumatic situation of being uninsured, will be sceptical about advice to shop around for suitable cover. But, as the survey points out, it is even more important for consumers who find themselves in this difficult scenario to get suitable cover for their home.

It seems Tánaiste Mary Harney may have got it right when she urged consumers to shop around for better value.

In effect, finding the right policy should guarantee that your home is neither over- or under-insured, something which can lead to problems later on.

Nor should consumers automatically stay with the same insurer. They should contact other brokers, taking time to find the most appropriate insurance for their particular circumstances.

On another front, the fledging IFSRA has a chance to prove its mettle in considering the damning report on tax scams and theft from customers at NIB, the Australian owned bank. It is also continuing its investigations into a web of irregularities at the AIB group.

Essentially, it is up to the regulator to restore consumer confidence in the country's financial institutions.

It will, however, be a good day's work on IFSRA's part if the insurance survey succeeds in aiding consumers to find better value for their hard-earned money. It will be a welcome sign that the new authority is living up to its mandate of helping people make informed decisions on financial affairs in a safe and fair market.

Besides dispelling the notion that there is no competition in the home insurance market, the survey has clearly demonstrated that consumers are being shamefully exploited by the insurance industry.

In marked contrast with past surveys, the underlying strength of this report is that IFSRA is an independent body with no axe to grind.